Hammond tells EU to end silence on post-Brexit expectations

Hammond told German business leaders EU would have to talk about post-Brexit relations

He stressed EU would have to reveal the kind of relationship it wants

EU has warned the U.K. that it cannot cherry-pick the kind of arrangement it wants

LONDON, U.K. - Addressing German business leaders, Philip Hammond has urged the European Union to end its "relative silence" about the kind of post-Brexit relations it wants with the U.K.

The chancellor has claimed that there is "little, if any signal" from the EU about its priorities for talks on future co-operation due to begin in March.

In his message delivered in Berlin, he is to say, "They say it takes two to tango. Both sides need to be clear about what they want."

In its most recent public statement on Brexit, the EU warned the U.K. that it cannot cherry-pick the kind of arrangement it wants.

In the month of March, the second phase of Brexit negotiations are to begin and will cover transitional arrangements after the U.K. leaves in March 2019 and future economic and security co-operation.

Further, internal discussions within the EU about the framework of future relations have already begun.

Discussions were initiated following December's first-phase agreement on so-called divorce issues, including the core issues - the divorce bill and the future of citizens' rights.

Both Hammond and Brexit Secretary David Davis are aiming to lay down a marker for the talks ahead when they address the Die Welt Economic Summit.

Hammond said in his speech that the EU must "put behind" any talk of punishing the U.K. for voting to leave the 28-member bloc and concentrate on maximizing the mutual benefits of close co-operation in areas such as defence, education, science, technology and culture.

Hammond said, "I know the repeated complaint from Brussels has been that the UK "hasn't made up its mind what type of relationship it wants. But in London, many feel that we have little, if any, signal of what future relationship the EU27 would like to have with a post-Brexit Britain."

Earlier in the day, an article prepared by the Frankfurter Allgemeine newspaper, the two men argued that financial services were pivotal to the "bespoke" Brexit trade deal wanted by the U.K.

Both the leaders have acknowledged that their stated objective of leaving the EU's internal market and customs union means the U.K. will not be able to enjoy all the benefits it currently does as a member of the EU after leaving.

They have insisted that the EU's desire to protect the integrity of the single market for its other 27 members is "not inconsistent" with the U.K.’s desire for the most comprehensive agreement possible.

They wrote in the report, “It makes no sense to either Germany or Britain to put in place unnecessary barriers to trade in goods and services that would only damage businesses and economic growth on both sides of the Channel. So as Brexit talks now turn to trade, the U.K. will look to negotiate a new economic partnership with the EU - the most ambitious in the world - that recognizes the extraordinary levels of interconnectedness and co-operation that already exist between us.”

Adding, “We should use the imagination and ingenuity that our two countries and the EU have shown in the past, to craft a bespoke solution."

Meanwhile, the U.K.’s preferred model for a post-Brexit deal is what Davis has described as Canada plus, plus, plus - a reference to Canada's low-tariff free trade deal with the EU but with services included as well as goods.

In the report, both the men clarified that unrestricted trade in services - which makes up about 80 percent of the U.K. economy - will be pivotal to any successful deal, as will financial and regulatory co-operation within Europe.

Meanwhile, Michel Barnier, the EU's chief negotiator, has warned the U.K. that it cannot hope to get a special deal for the City of London and that its options have narrowed as a result of it turning its back on the single market.

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